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Keystone XL Is Dead, but That May Not Even Matter

NEW YORK (TheStreet) -- Approval for the Keystone pipeline was pushed down the road again Tuesday, but this time it took an important Senate effort for incentives on energy efficiencies with it.

A bill that's been roaming around the floor of the Senate since 2011, promising incentives for efficient "smart grid" electric systems, got scuttled as partisan bickering over Keystone wouldn't allow the bill to get a vote. Democrats blamed Republicans and the Republicans blamed Democratic leadership, but the bottom line is that a bill with bi-partisan support, that would have helped everyone, failed to get passed due to the political football that Keystone has become. There hasn't been an energy bill that's been voted through by Congress since 2007.

And it's starting to look like the Canadians are running out of patience. At a conference of Canadian oil producers, delegates expressed dismay at the delays of getting a final dispensation for Keystone.

TransCanada (TRP - Get Report), the majority stakeholder in the Keystone pipeline, has proposed a different pipe route for moving increasing quantities of oil sands production from the Athabasca. Their idea is an $11 billion pipeline from Western Canada moving east to New Brunswick called the "Energy East" pipeline. A fully Canadian pipe accessing Canadian ports obviously won't need U.S. approval to construct. It seems clear that TransCanada is making new plans to keep up with ramping oil sands production, regardless of whether Keystone is ultimately approved.

What also seems clear is that the lack of approval of Keystone won't slow down Canadian production of oil sands assets much. Of the Canadian oil stocks in the Athabasca, I particularly like undervalued Cenovus(CVE - Get Report).

Dan Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts on
CNBC,
Bloomberg US and UK and
CNNfn.

Dan obtained a bachelor of arts degree from the State University of New York at Stony Brook in 1982.